The Art of the Resale: How To Score Hundreds by Reselling Stuff
Written by
Cynthia Measom
Edited by
Molly Sullivan
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Target’s Stanley Valentine’s cups, Taylor Swift concert tickets, and most recently Trader Joe’s tote bags — these are all viral items that savvy resellers scooped up and resold for a profit.
“Viral products can go from shelf to sold-out sensation overnight, and understanding the intricacies of reselling can be the key to unlocking significant profit potential,” explained Adrian Rich, GM and product lead at Seller Snap. “But, there are risks, and being caught off-guard can leave you with a surplus of inventory and no way to offload it.”
Here’s how to avoid potential pitfalls and score hundreds by reselling viral products.
Know What Type of Products Go Viral
“From a broader perspective, products that often go viral usually encapsulate the zeitgeist or serve a unique need, like the Fidget Spinners or viral apparel like ugly Christmas sweaters,” said Virginia Miller, with Simpl Fulfillment, an Austin-based leader in eCommerce fulfillment and FBA Prep. “These items were initially sold for a few dollars but were then resold at five to 10x their initial prices due to extraordinary demand spurred by viral social media attention.”
Be Aware and Ready To Jump on a New Trending Opportunity
Miller explained that reselling a viral item means you have to be able to promptly identify trends and put supply chain operations into place quickly.
“It’s a case of overhead optimization for inventory management, a robust fulfillment strategy to ensure prompt delivery, along with flexible advertising campaigns to tap into the surge of demand,” she said. “But remember, the hype around viral products can be ephemeral, hence timing is of the essence.”
Avoid Price Gouging
If you have dreams of finding a product that people will pay way above retail for and making a tidy profit on Amazon or other marketplaces, tread carefully.
“Third-party marketplaces, like Amazon, penalize sellers for price gouging,” Rich said. “If your price is too high, expect to be hit with a pricing violation. Be realistic about your margins, and if you are not sure if there is a profitable enough margin, it is probably that this viral product is not an opportunity after all.”
Don’t Be Distracted By Shiny, New Toys
Focusing solely on viral products to resell is probably not the best strategy if you’re planning for longevity as a reseller.
“The best products for resellers are the ones that can be resold again and again and again,” Rich said. “Choose products that can be replenished in order to maintain higher levels of inventory over longer times, building momentum this way will help you grow, and stay afloat.”
Find a Good Pricing Strategy
Rich said that maybe the most important step is to find and implement a good pricing strategy.
“Repricers automate this function and are key to staying competitive,” he explained. “Any product could be a good seller, but market factors affect velocity. If you do not have a good repricer, you don’t stand a chance.”
Realize That Profit Margins Are Often Higher but Can Be Risky
Miller said that profit margins are often higher when reselling viral products compared to regular items.
“This is due to the psychology of scarcity and immediacy, which allows for premium pricing, leading to gross margins upwards of 50%-60%,” she said. “Regular products, on the other hand, often sit in the 20%-30% gross margin range.”
However, even though there’s a potential for doubling or even tripling your profit margins, Miller said that selling viral products is not all sunshine and rainbows.
“The rapid influx of competition with viral products can lead to saturation quickly, and the interests of consumers can wane at the drop of a hat,” she explained. “So, although the higher return potential is attractive, it’s crucial to diversify and not completely rely on viral product resale.”
Takeaway
“Having navigated the eCommerce landscape and seen such scenarios unfold, I can say that while fulfilling the demand for viral products can be profitable, the robustness of your overall business model, coupled with an effective fulfillment strategy, will be a surefire way to ensure sustainability and longevity in the marketplace,” Miller said.
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